Genzyme’s Woes Piling Up as FDA Panel Says Data on Leukemia Drug are Lacking
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scrutinizing the company’s every move. Genzyme is getting ready to see if it can pass an FDA inspection at the Allston factory, but European regulators have already reported they found a “major” deficiency and several other shortcomings when they visited the factory during the week of Aug. 17. This means investors can’t blame the Allston problems on “an overzealous FDA,” said Christopher Raymond, an analyst with Robert W. Baird in Chicago, in a note to clients.
“It’s very surprising Allston still has deficiencies,” Raymond said in a note yesterday. “While we have urged patience until now, we are surprised that there are still significant deficiencies at Allston this late in the game.” He downgraded his rating on the stock to “neutral.”
What’s even worse for Genzyme is that this harsh critique is coming from regulators who were previously seen as friendlier to the company than the FDA. European regulators, after all, allowed Genzyme to manufacture a drug for Pompe disease at a larger scale to meet demand. The FDA has held up that request for many months by saying Genzyme needed to show more evidence the drug is equivalent to the same product made in smaller batches.
Could things get much worse? They could, according to Raymond. Genzyme recently disclosed that the FDA could withdraw the company’s orphan drug designation for agalsidase beta (Fabrazyme) and alglucosidase alfa (Myozyme). That status is important because it grants the company monopoly status for treatment of those rare diseases. Those two drugs, when added to imiglucerase, accounted for $511.7 million in second quarter sales—almost exactly half of the company’s total revenue.